Facing Up To Problems From The Past

The cool gusts of late summer seem to have inspired some clear-headed actions by the chastened chieftains of Connecticut business.

During the past week, three homegrown companies -- United Technologies Corp., Ames Department Stores and Dexter Corp. -- have taken steps to address long-standing problems.

Each case is distinct and unrelated to the others. But a similarity welcome in the current era of short-term thinking is that each marked an instance of management being willing to take a hit, put the past behind and move forward.

One week ago Friday, in an Alexandria, Va., federal court, Hartford-based UTC accepted responsibility for illegal activities by two of its divisions -- Pratt & Whitney of East Hartford and Norden Systems of Norwalk -- in the 5-year-old Ill Wind defense procurement scandal. As the price of its admission, UTC will pay fines totaling $6 million.

Dexter, meanwhile, pleaded guilty Thursday to polluting the Connecticut River from its Non-Woven Division paper mill in Windsor Locks, in a case going back to the 1960s. Under the settlement, Dexter will pay $13 million in civil and criminal fines.

Ames, the Rocky Hill-based discount retail chain which sought legal protection from creditors in 1990, filed a more detailed debt-repayment plan and announced other steps Thursday that could enable it to emerge from Chapter 11 bankruptcy.

Such moves may prove less than popular in some quarters, notably among UTC and Dexter investors looking for big stock gains and Ames' unsecured creditors who figure to recover only a fraction of what they are owed.

But the actions bode well for the long-term health of the three companies, all important players in Connecticut's economy. And there's a certain satisfaction that comes with breathing in the brisk September air and getting on with the business of business.

"It makes sense, both psychologically and financially, to hang out all your dirty laundry and get it out of the way," says Nicholas S. Perna, chief economist at Connecticut National Bank in

Hartford. "Then you come into the recovery -- if there's a recovery -- with an even bigger bang."

Not surprisingly, the enthusiasm was more tempered on Wall Street. "People always cheer when management takes these kinds of actions, but all they're doing is taking a big eraser to undo the problems they created," observes David S. Leibowitz, director of research for American Securities Corp. in New York.

Still, although acknowledging criminal culpability or financial mismanagement carries a stigma, the actions of the past week seem, on balance, to be a positive sign for Connecticut business.

If nothing else, they suggest the state's corporate leaders are recognizing, just as state government leaders have, that the 1980s are finally over and it's time to work off the lingering hangover.

Unfortunately, little in the presidential campaign to date has shown that either of the candidates is serious about addressing the nation's long-standing financial problem, the federal budget deficit, projected at $400 billion for the coming year.

The deficit represents bills overdue and pain deferred. Reluctance to tackle the problem and bring it under control can only be interpreted as fear of the future, fear of decline. Continued delay will make actual decline inevitable and irreversible.

Say what you want about Ross Perot, but he recognizes a problem when he sees one. Put off by campaign talk of "family values" designed to skirt the issue of economic peril, Perot has observed that the only relative not discussed by Bush and Clinton is the "crazy aunt we keep in the basement" -- the deficit.

The federal government can neither declare bankruptcy nor take a charge against quarterly earnings, as private corporations can. But it, too, should be forthright in facing up to a problem that can no longer be ignored.